Program

AFD / EUDN 2009 :

Fragmentation in a globalized world

9th December 2009, Paris
Conference Center Pierre Mendès-France
Ministère de l’Economie, de l’Industrie et de l’Emploi
139, rue de Bercy - 75012 Paris

 The collapse of the iron curtain and the Soviet system aroused the immense hope of a united world that would transcend all the differences between nations, whether economic, technological, or ideological.  The drive towards the globalisation of the world economy was to be instrumental in making countries converge economically while the end of the cold war was expected to shape a homogeneous entity largely adhering to the rising liberal ideology.  Today, twenty years later, one is compelled to reckon that the dream has not come true. On the one hand, the increased economic interdependence on world level has had the effect of encouraging the rise of new countries on the world scene, particularly in East and South Asia as well as Latin America.  Their emergence has brought about profound changes in the hierarchy of economic powers, causing new and deep insecurities in the advanced countries of the West.  The temptation of protectionism has grown as a result. On the other hand, the homogenisation of political and value systems has not occurred and has probably been put in reverse.  Due to a conjunction of complex factors that include geopolitics, anti-Western feelings have grown in some regions of the world, particularly in Muslim countries.  The difficulty inherent in the choice between following the so-called Western path and maintaining the values of the ‘imagined’ traditional civilisation has thus been exacerbated in these regions, giving rise to serious tensions in international relations and to the posturing of countries in the southern hemisphere as the new champions of victimised nations (e.g., Iran).
The speakers will aim at covering the aforementioned issues by adopting the standpoint of major regions of the world.
 

9h: Opening session

9h10-10h15: Session on Asia

Chair: Yves GOUDINEAU, Research Director at École française d'Extrême-Orient and Visiting Professor at Oxford, Wolfson College.

9h15-9h45:  Speaker: ALAN WINTERS, Professor at the University of Sussex and Chief Economist of the Department of International Development (DFID), UK

Fragmentation, the financial crisis and Asia

This presentation will look at two distinct sense of the fragmentation. The first is the dramatic way in which production processes have been disaggregated over the last two decades. We will look at the degree of vertical specialisation in Asia and elsewhere and consider briefly its role in the growth of trade and the generation of economic welfare. Using linked input-output tables for Asia we will trace links between Asian economies and consider the implications of such slicing up of the value chain for the speed and depth of the transmission of the financial crisis. Prima facie it may explain why the fall in trade has been so large relative to the fall in value added, but not why the fall in trade has been so large proportionately to trade itself.

The rapid transmission of the crisis, especially in terms of the increase in unemployment, and the political pressure on governments to be seen to be serving their own electorates, makes a second sense of fragmentation important. Just as the global economy has integrated pretty steadily over the last six decades, we do not wish to see it fragment over the next six months. The paper will consider the evidence on trade restrictions and, if possible other sources of disintegration, over the period since September 2008. It will reflect on the dangers and the appropriate policy responses to them by governments.

9h45-10h15: Debate
 

10h20-11h25: Session on Europe

Chair: Dr Indira RAJARAMAN, Member of the Thirteenth Finance Commission of India

10h25-10h55: Speaker: ANDRE SAPIR, Professor at the Université Libre de Bruxelles

Europe: a less fragmented global and regional actor? 

One of the potentially crucial consequences of the current financial is the emergence of the G20 as a key actor of global governance. This development was long overdue given the lack of legitimacy of the G7/8, the self-appointed world’s directoire, which only represents 15 percent of world population. It opens the prospect of reforming the global governance framework set up after WWII to reflect the reality of the 21st century and the place of emerging and developing countries in the world.

The EU has potentially a comparative advantage in tackling up the challenging agenda of global governance since it is an example par excellence of international governance and its standpoint is the result of an aggregation of diverse national preferences. Diversity is, however, also the EU’s great weakness, in the many policy areas, including money and finance, where it does not speak with one voice.  This suggests that the EU’s actual role in global governance will depend on its capacity to reform its internal governance.

This global EU agenda should not, however, overshadow the fact that the crisis has also revealed the importance of the regional EU agenda. This crisis has highlighted important issues related to the economic models and the social regulation frameworks the eastern European countries and the CIS have been enforcing since the early eighties. This has exposed the weakness of the euro area’s (and more broadly the EU’s) capacity in dealing with neighbouring countries that are crucial to its prosperity.

The paper, therefore, will analyze the EU’s reaction to the global and regional challenges raised by the crisis and point to directions for change in internal governance that may foster the EU’s capacity to improve its involvement in global and regional governance.       

10h55-11h25: Debate

11h25-11h40: Coffee Break

11h40-12h45: Session on the Middle-East and Maghreb

Chair: Ghazi HIDOUCI, Economist and Former Finance Minister of the Algerian Government.

11h45-12h15: Speaker: MUSTAPHA NABLI, Senior Advisor at the World Bank.

Fragmentation and Fault Lines in the Euro-MED-Arab Space

The development experience of the Middle East and North Africa region and more broadly the Muslim World over the last 20 years and their relationship with Europe (and the rest of the world) reveals a number of broad changes which show more fragmentation and deeper fault lines. The paper will consider three dimensions.

First, the institutional space for economic cooperation and coordination has evolved significantly. It became much more complex and fragmented both within the Middle East and North Africa region space and the Euro-MED space (and the US).

Second, driven by the major factors of own domestic reforms, the regional environment, political and security conditions as well as global conditions (including commodity prices) various groups of countries within the MENA region had very different economic and social outcomes. The result has been more divergence in outcomes within the region and compared to Europe.

Third, a number of major policy tensions emerged between Europe and the MENA countries of which migration has been the major one. The population dynamics have created the potential for strong complementarities and large gains from increased flows of migration between the region and the rest of world, more specifically Europe. However, the political dynamics have pulled in the opposite direction of more restrictions on the movement of people. The perceptions of “double talk” by the west promoting globalization and openness for trade and capital but restrictions on movements of people is a major fault line: the clash between “fear” from one side and the “possibility of hope” from the other.

12h15-12h45: Debate

12h45-14h: Lunch Break

14h-15h05: Session on Africa

Chair: Martin BALEPA, Afristat Director

14h05-14h35: Speakers: FRANCOIS BOURGUIGNON, Director of the Paris School of Economics and PIERRE JACQUET, AFD Chief Economist      

Which growth model for Sub-Saharan Africa?

Sub-Saharan Africa is likely to depend more on globalization than other continents. Therefore its relative marginalization from the world economy flows makes it particularly vulnerable. There is no evidence for the existence of a natural geopolitical region which would encompass Europe and the African continent, at least in terms of economic dynamics. The attractive force of oil, mining and cash crops does not behave according to a regional logic and it mainly leads to Sub-Saharan Africa’s entrapment into resource rent economies. The recent and sustained growth of the sub-continent between the mid-1990’s and 2008 should be analyzed within this context. Is it mostly a temporary phenomenon, whether it is the manifestation of a catching up stage following previous shocks or the result of an increase in commodity prices? Is it a structural break? The paper will link the geopolitical situation of Sub-Saharan Africa and the long-term growth of the sub-continent in order to investigate the African growth model through three main questions. Could the African growth model be different from the developed countries or the Asian ones? How to lift the barriers hampering agricultural development and design another “green revolution” in Africa? Is a late industrialization stage for Africa conceivable considering that Asian countries tend to corner the markets with a cheap, educated and plentiful labour force? The paper will then conclude on the role and the responsibilities of the European Union in terms of trade, financial, migration and official development assistance policies

14h35-15h05: Debate

15h10-16h15: Session on Latin America

Chair: Javier SANTISO, OECD Development Center, Director

15h15-15h45: Speaker: CARLOS WINOGRAD, Associate Researcher at Paris School of Economics and  former Secretary of State for Competition, Deregulation and Consumer Affairs in Argentina.

Fragmentation, globalization and Latin America: from the Financial Crisis to the Challenges of the Next Generation

The economic emergence of the populous nations of Asia has brought a massive shock to the human development path of the planet. The rapid growth and the social transformation of China, India and other Asian nations where almost half of the world population is subject to profound changes poses fundamental challenges for the rest of the countries.

The expected homogenization of cultural modes and political systems has not proven to be a harmonious phenomena leading to gradual convergence. The tensions brought by this trend of events are apparent in all the regions of the world, the mature countries of the west as well as intermediate and less developed economies.

In this presentation we will discuss the current changes in the engines of world development from a Latin American perspective. The impact of increased economic interdependence, trade dynamics and geography, as well as the challenge of the emerging new hierarchy of world powers is a significant exogenous shock for Latam nations. This extension of the western hemisphere with, at first glance, high degrees of homogeneity in culture, religion, and language has adopted in the last decades a democratic political framework. However, the disparities among countries and potential sources of tensions for a balanced development path within countries are far from negligible.

Starting from the impact of the current financial crisis on the economies of Latin America our presentation will extend to the fundamental challenges for the region of the current trends of world development for next generations. Among the main issues we will focus on are food, environment, energy and governance.

15h45-16h15: Debate

16h15-16h30: Coffee Break

16h30-17h30: Final Round Table

Daniel COHEN, Professor at Ecole Normale Supérieure and Paris School of Economics
Ahmed GALAL, Director of the Economic Research Forum in Cairo
David HELD, Co-director of the Center for the Study of Global Governance, London School of Economics

Justin LIN, World Bank Chief Economist

Jean-Philippe PLATTEAU, Professor at Namur University

17h30: Closing speech by Jean-Michel Severino, AFD CEO